February 2012

June 06, 2010

How do you craft a compelling goal?

Management writers are unanimous that a key management function is
to articulate a compelling purpose. Jim Collins calls it “big, hairy, audacious
goal.” John Kotter says that the goal should be “desirable, feasible, focused,
flexible and communicable.”

A firm needs a compelling purpose because, as Gary Hamel notes,
“initiative, creativity and passion are gifts. They are benefactions the
employees choose, day by day, and moment by moment, to give or withhold. They
can’t be commanded.” Exhortations to work harder or ordering workers to love
their customers or kill their competitors won’t induce people to give their
very best. Managers need to articulate a purpose that is inherently
self-motivating.

To see how to do that, let’s put ourselves in the shoes of an
organizational strategist and examine the possible options for crafting a
compelling purpose for an organization. One obvious wrong turning would be to
propose, as Frederick Taylor implied, that the purpose of a firm, a project, or
even work itself is to produce goods and services. As a goal, producing goods
and services doesn’t get anyone’s juices flowing. It’s about mundane things and
therefore deadening as a goal.

Another angle of attack would be to articulate the goal in terms
of bigger things. Some firms have done this in the hope that if the thing is
big enough, it will inspire enthusiasm. Thus, Google may offer to give people a
chance to “change the world,” and GM may say that it is “reinventing the
automobile.” The problem with this approach is that it may be difficult for
people doing the work to see how such grandiose goals relate to what they do on
a day-to-day basis.

Yet another approach would be to draw on the language of sports
and aim to be “a winner.” Jack Welch did this famously in his goal to make GE
number one or two in every sector it was involved in. However, when every firm
is trying to be a winner, the ability of such a goal to inspire people on a
long-term basis is questionable.

Nor would aiming to maximize shareholder value be likely to get
people jumping out of bed in the morning with a spring in their step. Once the
goal becomes making money for the company, then people start thinking about
making money for themselves, and collaboration and creativity tend to fall by
the wayside.1

Or we could go in the opposite direction and formulate the
organizational goal in terms of lofty, big-hearted ideals like beauty, truth,
or love. These moral imperatives have aroused human beings to extraordinary
accomplishments throughout the millennia. The problem with articulating a
business goal in terms of such moral imperatives is that they usually have
little to do with what the business is about. Cynicism sets in when the
organization’s real goals turn out to be very different from the stated ideals.

Still yet another approach would be to point to the firm’s
activities as a good corporate citizen (“Yes, the principal function of our
firm is to make money, but we also care for the environment, make charitable
contributions, and undertake other worthwhile social activities”). The
difficulty with this approach is that as long as the primary goal is to make
money, these acts of corporate citizenship are likely to be seen both
internally and externally as window dressing. And window dressing is unlikely
to bring out the very best in people.

Strategists faced with these issues may despair of ever being able
to articulate a goal that is simultaneously compelling, realistic, and unlikely
to breed cynicism. Yet the problem is not as insoluble as it looks. In fact,
the answer is so obvious that it is actually staring us in the face. Once we
began to think of articulating the organizational goals in terms of customers
and stakeholders, the solution is simple.

In 1973, Peter Drucker provided a clue as to where to look: “There
is only one valid definition of business purpose: to create a customer. . . .
It is the customer who determines what a business is. It is the customer alone
whose willingness to pay for a good or for a service converts economic
resources into wealth, things into goods. . . . The customer is the foundation
of a business and keeps it in existence.”16

The shift in focus from things to people is a first step, but by
itself, it’s not enough to constitute a compelling goal today. In 1973, it
might have been enough for an organization to have a customer—someone who is willing to pay for the good or
service. In today’s more intensively competitive world, merely having a
customer who is willing to pay for the good or service is a precarious
existence for any firm. The key to an enduring future is to have a customer who
is willing to buy goods and services both today and tomorrow. It’s not about a
transaction; it’s about forging a relationship. For this to happen, it isn’t
enough that the customer be passively satisfied. The customer must be
delighted.

Delighting customers is not only a requirement of business
survival; it also offers a solution to the dilemma of how to articulate a
morally worthwhile and inspiring goal that is closely related to what the
organization does. That’s because delighting other people is inherently
motivating. It leads to an understanding of the meaning of work, which relates
to people, not things.

The meaning of work isn’t in the bread that we’re baking: it’s in
the enjoyment the customers get from eating the bread.

The meaning of work isn’t in the words the actor is reciting; it’s
in the response of the audience to those words.

The meaning of work isn’t in the toy that we’re putting together;
it’s in the smile on the face of the child.

The meaning of work isn’t in the bricks and mortar of the house
we’re building; it’s in the happiness we generate in a family with a house that
precisely meets their needs.

The meaning of work isn’t in the words or the musical notes of the
song that we’re writing; it’s in the feeling of yearning we generate in the
heart of the listener.

The meaning of work isn’t in the paper and print of the insurance
policy we’ve issued; it’s in the security that we’re providing to the spouse
and the children.

The meaning of the boutique hotel that we’re running isn’t in the
rooms and the physical facilities; it’s in the feeling of being at home away
from home that we generate in people who stay there.

The meaning of the software we’re coding doesn’t lie in bits and
bytes; it’s in the cool things that users can do with the software.

The meaning that we see in work resides in the responses of the
people for whom we are doing the work.

A key reason that traditional management is so dispiriting and
often devoid of meaning is its focus on things and systems ahead of people. In
such a world, workers find it difficult to see the point of what they are
doing. By contrast, once the focus is on providing a clear line of sight—and
continuously updated information—as to whether and to what extent clients are
being delighted by what is being done, the meaning of work becomes obvious.

Articulating the goal of an organization as one of delighting
customers changes the relationship from one of commercial manipulation to human
interaction. It means a shift from thinking about how to manipulate customers
into spending money on the organization’s goods and services toward considering
how we could do something that these people would genuinely enjoy, as a result
of which, incidentally, money might change hands. The adjustment is subtle but
fundamental. Customers appreciate their needs being attended to.

Even better, delighting clients as a goal also makes dramatic
inroads on the problem of worker disgruntlement: delighting clients is an
inherently inspirational goal for people doing the work, because delighting
other people intrinsically appeals to our hearts. Thinking about and helping
other people is central to ethics.

To top it off, delighting clients also makes hard-headed business
sense. By focusing activity on what delights clients and jettisoning anything
that is irrelevant to that goal, work is tightly linked to accelerating
innovation and attaining higher productivity.

Hi Steve, thanks for this interesting article. What I would like to know is how these principles apply to public organisations such as the police, child protection services, government agencies etc. How can people who work in such organisations ever delight their customers?
Many greetings from Amsterdam,
Johanna Kroon

Thanks, David for the great quote on the champagne test. I resonated with its wisdom because I have seen too many missed opportunities in workplaces for meaningful ritual. Projects just seem to morph into another one without even so much as a pause for acknowledgment the ending of something and beginning of another. A lot of my work is about encouraging leaders to understand the benefits of segmenting work projects and celebrating or ritualizing the ending of each.
Midge